The gal operon of Escherichia coli is negatively regulated by the Gal repressosome, a higher order nucleoprotein complex containing a DNA loop that encompasses two gal promoters. In the repressosome structure, Gal repressor (GalR) dimers are bound to the two operator sites, flanking the promoter region, thus generating a DNA loop. The DNA loop is stabilized by binding of the architectural HU protein to the apex of the loop, and negative supercoiling. The gal promoters are also regulated in opposite directions by GalR without DNA looping. The repressosome-mediated as well as looping-independent transcription regulation of the two promoters is lifted in the presence of the inducer D-galactose. We tested the effect of D-galactose on various DNA-protein and protein-protein interactions of different regulatory complexes and on transcription repression in vitro. We found that the inducer breaks up the repressosome with clear intermediates in a concentration-dependent manner. The sequential disassembly generates different stages of regulation of the gal operon. The D-galactose-dependent switch from one stage of regulation to another satisfies the amphibolic requirement of the gal operon.